The Brookings Institute, February 20, 2020: Bloomberg’s comments on redlining distort a history of racism
Comments surfaced from a 2008 lecture by former New York City mayor and current Democratic presidential candidate Michael Bloomberg, in which he asserted that the period’s housing crisis was due to the end of “redlining,” the mid-20th century discriminatory practice that made home loans unavailable in Black neighborhoods. Bloomberg’s conclusion is utterly contradicted by the facts, but it persists because it reinforces one of the most pernicious narratives of the American economy: that the economic and social statuses of poor and Black people are of their own doing.
Bloomberg’s argument—one that he has repeated over the years—is wrong from start to finish. Take his definition of redlining: “Redlining, if you remember,” Bloomberg said, “was the term where banks took whole neighborhoods and said, ‘People in these neighborhoods are poor, they’re not going to be able to pay off their mortgages, tell your salesmen don’t go into those areas.’”
If you do not “remember” redlining as Bloomberg defines it, that’s probably because his definition is nonsense. Redlining was the U.S. government practice—operating through the Home Owners’ Loan Corporation—of defining the riskiness of mortgages based on the racial makeup of neighborhoods. Areas with sizable Black populations were marked in red ink on maps as a warning to mortgage lenders that those areas would be too risky to underwrite, effectively isolating Black people in neighborhoods that would suffer lower levels of investment than their White counterparts.